Question 1

Distinguish between utilization and efficiency.

Accepted Answer

The answer of Distinguish between utilization and efficiency....

Question 2

Effective capacity is typically larger than design capacity.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following costs would be incurred even if no units were produced?

Accepted Answer

A) raw material costs 
B) direct labor costs 
C) transportation costs 
D) building rental costs 
E) purchasing costs

Question 4

Define fixed costs.

Accepted Answer

The answer of Define fixed costs....

Question 5

A graphic design studio is considering three new computers.The first model,A,costs $5000.Model B and C cost $3000 and $1000 respectively.If each customer provides $50 of revenue and variable costs are $20/customer,find the number of customers required for each model to break even.

Accepted Answer

The answer of A graphic design studio is considering three...

Question 6

________ is actual output as a percent of design capacity.

Accepted Answer

The answer of ________ is actual output as a percent...

Question 7

Consider the simple 3-station assembly line illustrated below,where the 2 machines at Station 1 are parallel,i.e. ,the product only needs to go through one of the 2 machines before proceeding to Station 2.  What is the bottleneck time of this process?

Accepted Answer

A) 12 min. 
B) 20 min. 
C) 38 min. 
D) 6 min. 
E) 10 min.

Question 8

The net present value of $10,000 to be received in exactly three years is considerably greater than $10,000.

Accepted Answer

A) True 
 B)False

Question 9

Consider the assembly line below.The three fabrication operations run in parallel,such that each batch of 20 units only needs to go through one of the three fabrication operations.After that,each batch needs to go through both assembly operations,which occur simultaneously (specifically,10 components are made for each unit in the fabrication stage-some components are then assembled in the Assembly 1 area while others are assembled in the Assembly 2 area).The units are packaged and made ready for shipment in the final stage.  What is the throughput time per batch of this operation?

Accepted Answer

A) 88 min. 
B) 8 min. 
C) 40 min. 
D) 34 min. 
E) 33 min.

Question 10

To find the throughput time with simultaneous processes,compute the time over all paths and choose the shortest path through the system.

Accepted Answer

A) True 
 B)False

Question 11

Utilization will always be lower than efficiency because:

Accepted Answer

A) effective capacity is less than design capacity. 
B) effective capacity is greater than design capacity. 
C) effective capacity equals design capacity. 
D) expected output is less than actual output. 
E) expected output is less than rated capacity.

Question 12

Changes in capacity may lead,lag,or straddle the demand.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following techniques is NOT a technique for dealing with a bottleneck?

Accepted Answer

A) Schedule throughput to match the capacity of the bottleneck. 
B) Increase the capacity of the constraint. 
C) Have cross-trained employees available to keep the constraint at full operation. 
D) Develop alternate routings. 
E) All are techniques for dealing with bottlenecks.

Question 14

A good capacity decision requires that it be tightly integrated with the organization's strategy and investments.But there are four other special "considerations" to making a good capacity decision.Identify them.

Accepted Answer

The answer of A good capacity decision requires that it...

Question 15

Suppose that the market has a 70% chance of being favorable and a 30% chance of being unfavorable.A favorable market will yield a profit of $300,000,while an unfavorable market will yield a profit of $20,000.What is the expected monetary value (EMV)in this situation?

Accepted Answer

The answer of Suppose that the market has a 70%...

Question 16

A new machine tool is expected to generate receipts as follows: $5,000 in year one;$3,000 in year two,nothing in the next year,and $2,000 in the fourth year.At an interest rate of 6%,what is the net present value of these receipts? Is this a better net present value than $2,500 each year over four years? Explain.

Accepted Answer

The answer of A new machine tool is expected to...

Question 17

A product is currently made in a process-focused shop,where fixed costs are $9,000 per year and variable cost is $50 per unit.The firm sells the product for $200 per unit.What is the break-even point for this operation? What is the profit (or loss)on a demand of 200 units per year?

Accepted Answer

The answer of A product is currently made in a...

Question 18

________ is actual output as a percent of effective capacity.

Accepted Answer

The answer of ________ is actual output as a percent...

Question 19

The theory of constraints has its origins in:

Accepted Answer

A) linear programming theory. 
B) the theory of economies of scale. 
C) material requirements planning. 
D) the theory of finite capacity planning. 
E) Goldratt and Cox's book,The Goal: A Process of Ongoing Improvement.

Question 20

________ analysis finds the point at which costs equal revenues.

Accepted Answer

The answer of ________ analysis finds the point at which...

Exam 20: Capacity and Constraint Management

Distinguish between utilization and efficiency.

Effective capacity is typically larger than design capacity.

Which of the following costs would be incurred even if no units were produced?

Define fixed costs.

A graphic design studio is considering three new computers.The first model,A,costs $5000.Model B and C cost $3000 and $1000 respectively.If each customer provides $50 of revenue and variable costs are $20/customer,find the number of customers required for each model to break even.

________ is actual output as a percent of design capacity.

Consider the simple 3-station assembly line illustrated below,where the 2 machines at Station 1 are parallel,i.e. ,the product only needs to go through one of the 2 machines before proceeding to Station 2. What is the bottleneck time of this process?

The net present value of $10,000 to be received in exactly three years is considerably greater than $10,000.

To find the throughput time with simultaneous processes,compute the time over all paths and choose the shortest path through the system.

Utilization will always be lower than efficiency because:

Changes in capacity may lead,lag,or straddle the demand.

Which of the following techniques is NOT a technique for dealing with a bottleneck?

A good capacity decision requires that it be tightly integrated with the organization's strategy and investments.But there are four other special "considerations" to making a good capacity decision.Identify them.

Suppose that the market has a 70% chance of being favorable and a 30% chance of being unfavorable.A favorable market will yield a profit of $300,000,while an unfavorable market will yield a profit of $20,000.What is the expected monetary value (EMV)in this situation?

A product is currently made in a process-focused shop,where fixed costs are $9,000 per year and variable cost is $50 per unit.The firm sells the product for $200 per unit.What is the break-even point for this operation? What is the profit (or loss)on a demand of 200 units per year?

________ is actual output as a percent of effective capacity.

The theory of constraints has its origins in:

________ analysis finds the point at which costs equal revenues.